Like all other expenses, whether travel is deductible depends on the facts and circumstances of the travel. All travel can be deductible if your facts are right. One of our School of Tax Strategy students asks the following question about deducting international travel.

Q: Hello Tom, I was just on your travel, meals, and entertainment call and was not able to ask my question as time really flew by. So, my husband and I are going to Mexico in March for vacation for a week and I was wondering if there is ANYWAY we can make the trip or at least part of the trip be deductible? If so, what do we need to do and how do we document it? (We did purchase our two first rental properties in December 2010 that have been bringing in rent from day one). Also, as I am from Sweden I tend to want to fly home every so often... is there something I can do to make those travels deductible? Thank you for teaching what you know! /Helena from Philly PA

A: In order for your trip to Mexico to be deductible (or your trips to Sweden), you must be traveling for business. You could be traveling to hold a business meeting, such as an annual shareholders meeting, or you could be traveling to research and purchase real estate (your business). You must be able to show a true business purpose for the travel and that the travel is ordinary and necessary. In our course, Travel, Meals and Entertainment, we go through in detail how to determine whether your travel is ordinary and necessary.

One other thing for international travel. You don’t have to spend all of your time, or even most of your time on business to get a portion of it deductible. Whatever portion of the time you spend on business is the portion you will get to deduct. This is different than domestic travel, where it’s all or nothing.

Warmest regards,

Tom